Washington Post Responds To PartyGaming Settlement

After the announcement Tuesday of the settlement between PartyGaming PLC and the United States Attorneys Office, the Washington Post followed up on its 2008 two day investigation into online poker with a response.

Headed by Gilbert M. Gaul – who investigated the scandals of Absolute Poker and Ultimate Bet in cooperation with the CBS newsmagazine “60 Minutes” in late 2008 – the Washington Post article delved into some of the ramifications that the settlement could have for the online poker world. Gaul’s article states that the settlement is “…a development that could signal a shift in the murky and unregulated world of online gambling.”

The settlement between PartyGaming and the U. S. attorneys in New York calls for a fine of $105 million to be paid by the company over the next 3 ½ years. Along with the payment of the fine, PartyGaming also admits to violating what the Post article calls “a disconnect between 21st century technology and the 20th century laws used to protect Americans from gambling” through violations of the Unlawful Internet Gaming Enforcement Act (UIGEA), which was enacted in late 2006. Under the terms of the “Statement of Facts” agreement with U. S. representatives, PartyGaming officials said the government would not prosecute the parent firm or any of its subsidiaries for offering Internet gambling services to U.S. customers between 1997 and October 2006, when it voluntarily withdrew from the market after the UIGEA enactment.

In the Post article, Gaul states that “The (Department of) Justice’s position is considered controversial with some members of Congress and gaming analysts, arguing it has steered U. S. players to unregulated offshore sites.” Along with this statement, Gaul includes a quotation from Joseph M. Kelley, a professor of business law at the State College at Buffalo. “The U. S. government has now succeeded in driving out the reputable, publicly-traded Internet gaming operators,” he proposed. Kelley, who has also served as an expert witness for gaming and government interests, added: “It has not decreased online gambling, but has reduced the ability to monitor suspicious transactions.”

The stock of many of the publicly traded online gaming companies on the London Stock Market rose after the settlement announcement. Gaul believes it is because “some financial analysts see the settlement as possibly leading to others, thus reducing uncertainty in the industry and opening the door to industry consolidation and expansion outside the U.S. Some analysts said PartyGaming also had now increased its chances of gaining a license from any future regulated U.S online gaming market.”

While the dust hasn’t settled regarding the agreement of PartyGaming and the U. S. government, Gaul’s Washington Post article does point out many of the advantages of such settlements for the online gaming world. For a full look at Mr. Gaul’s outlook on the settlement, view his article at the Washington Post.